During the first PPG, we showed that B7 provides a critical 2nd signal for T cell activation during the induction and effector phases of EAE. In MS, autoreactive T cells have received the first induction signal and no longer are dependent on B7 co-stimulation for clonal expansion but use B7, particularly B7-1, for effector function. We have made substantial progress by 1) developing a new understanding of the role of CD28 versus CTLA4 molecules in the activation and inhibition of autoreactive T cell responses and 2) beginning to understand how ICOS co-stimulation regulate autoimmunity by inducing IL-4 and super-inducing IL-10 expression. Blockade of ICOS co-stimulation decreases Th2 cytokines and increases Th1 cytokine production. We hypothesize that ICOS co- stimulation influences the generation of regulatory T cells in autoimmune disease and can lead to down-regulation of an autoimmune response via production of inhibitory cytokines, particularly IL-10. We have generated a new set of tools which includes new knock-out and congenic strains of mice, ICOS counter-receptor, fusion proteins, and mAbs that will help us further dissect the role of the CD28/TLA4/ICOS co-stimulatory pathways in autoimmune disease. In this renewal, we will build on these discoveries to: 1) elucidate mechanisms by which the B7-CD28/CTLA-4 pathway influences the initiation and progression of autoimmune disease in animal models of EAE and diabetes; 2) determine the role of the ICOS co- stimulatory pathway in the induction and effector phases of autoimmunity in murine models; and 3) extend and apply our discoveries in murine models of autoimmune disease to patients with MS and autoimmune diabetes. Specifically: in Project 1, Sharpe will extend the roles of B7 on T cells and of ICOS in regulating EAE; in Project 2, Kuchroo will examine the role of co-stimulation in genetic susceptibility to EAE; in Project 3, Benoist and Mathis will examine regulation by ICOS and B7/CD28/CTLA-4 in murine models of diabetes; and in Project 4, Hafler and Freeman will examine the consequences of ICOS and murine models of diabetes; and in Project 4, Hafler and Freeman will examine the consequences of ICOS and B7/CTLA-4 signaling upon activation and differentiation of T cells in controls and in MS and IDDM. Insights gathered investigating animal models of autoimmunity will be directly applied to human studies. It is through the communication between basic and clinical programs that we will rapidly transfer progress in the fundamental conceptus f co-stimulation from the laboratory to the pathogenesis and therapy of human autoimmune diseases.